The primary purposes of the
2006 Five-Year Performance Equity Plan for Officers and Senior Managers are
to:

•

Align executives’ interests
with those of the Company’s stockholders over the long term by linking a
substantial portion of compensation to the performance of the Company’s
Common Stock as compared to the Russell 2000 Index (with dividends
reinvested) over the five calendar years ending December 31, 2010.

•

Provide a way to attract
and retain key executives and managers who are critical to Lance’s future
success.

•

Provide competitive total
compensation for executives and managers including a portion based on the
performance of the Company’s Common Stock.

To achieve the maximum
motivational impact, the performance measures and the awards for meeting the
goal will be communicated to participants as soon as practical after the Plan
is approved by the Compensation Committee of the Board of Directors.

Each participant will be
awarded a Performance Equity Grant of Units, with each Unit equivalent in
value to one share of Common Stock of the Company, (the “Performance Equity
Units”) under the Lance, Inc. 1997 Incentive Equity Plan.

Plan Years

The period over which
performance will be measured is the five calendar years, 2006 through 2010
(the “Plan Years”).

Eligibility and
Participation

Eligibility in the Plan is
limited to Executive Officers and senior managers who are key
to Lance’s success. The Compensation Committee will review and approve
participants nominated by the President and Chief Executive Officer.

Exhibits A and B include
the list of participants approved by the Compensation Committee on February 8,
2006 and the Awards.

Performance Measure

The performance measures
for the Plan are shown below. Specific goals and related payouts are also
shown below.

For each trading day in the
period from October 1, 2005 through December 31, 2005 and for each
trading day in the period from October 1, 2010 through December 31,
2010, the average of the closing values of the Russell 2000 Index will be
determined and the average of the closing price of the Company’s Common Stock
will also be determined. Based on the average values as of December 31,
2005, it is assumed that
$100 is invested on January 1, 2006 in the Company’s Common Stock and $100 on the same
date in the Russell 2000 Index.

The performance measure is
the comparison of the cumulative total return on $100 invested in the
Company’s Common Stock (with dividends reinvested) over the five Plan Years
as compared to the cumulative total return on $100 invested in the Russell
2000 Index (with dividends reinvested) over the same five Plan Years. There
will be no vesting or payout if the cumulative total return on the Company’s
Common Stock does not equal or exceed the cumulative total return on the
Russell 2000 Index over the Plan Years.

Minimum

Target

Maximum

Common Stock over Russell
2000 Index

$

*

$

*

$

*

Award Level Vested

*

%

*

%

*

%

[*Targets not required to
be disclosed.]

Percent of payout will be
determined on a straight line basis from Minimum to Target and Target to
Maximum. There will be no payout unless the Minimum performance measure is
reached.

If a cash dividend is paid
with respect to the Company’s Common Stock, each participant will be credited
as of the applicable dividend payment date with an additional number of whole
and fractional Performance Equity Units (“Dividend Units”) equal to
(a) the total cash dividend the participant would have received had the
Performance Equity Units (and any previously credited Dividend Units with
respect thereto) had been actual shares of the Company’s Common Stock divided
by (b) the closing price of one share of the Company’s Common Stock on
the applicable dividend payment date. All Dividend Units shall become part of
the aggregate Performance Equity Units Award hereunder when credited to each
participant and shall be subject to all terms and

2

conditions of the Plan, including the vesting and payout
provisions set forth herein.

The performance measure and
specific goals will be communicated to each participant at the beginning of
2006.

Minimum, Target and Maximum
levels are as set out above.

The following definitions
for the terms Maximum, Target and Minimum help set the goal, as well as
evaluate the payouts:

•

Maximum: Excellent;
deserves payout above Target

•

Target: Normal or expected performance; deserves Target payout

•

Minimum: Lowest level of
performance deserving a payout

Attachments A and B list
the Awards for each participant as determined by the Compensation Committee.

Final Award payments and
the amount vested will be calculated promptly after the Compensation
Committee has reviewed the performance level achieved after December 31,
2010.

Adjustments

In the event that a
dividend shall be declared upon the Common Stock payable in shares of Common
Stock, the number of Performance Equity Units shall be adjusted by adding to
the Award a number of Performance Equity Units equal to the number of shares
which would have been distributable thereon if the Performance Equity Units
had been outstanding shares of Common Stock on the date fixed for determining
the stockholders entitled to receive such stock dividend. In the event that
the outstanding shares of Common Stock shall be changed into or exchanged for
a different number or kind of shares of stock or other securities of the
Company or of another corporation, or changed into or exchanged for cash or
property or the right to receive cash or property (but not including any
dividend payable in cash or property other than a liquidating distribution),
whether through reorganization, recapitalization, stock split-up, combination
of shares, merger or consolidation, then each Performance Equity Unit shall
be adjusted to become a right to receive the number and kind of shares of
stock or other securities or cash or property or right to receive cash or
property into which each outstanding share of Common Stock shall be so changed
or for which each such share shall be exchanged. In the event there shall be
any change other than as specified above, in the number or kind of
outstanding shares of Common Stock or of

3

any stock or other
securities into which such Common Stock shall have been changed or for which
it shall have been exchanged, then if the Compensation Committee shall in its
reasonable discretion determine that such change equitably requires an
adjustment in the Performance Equity Units, such adjustment shall be made by
the Compensation Committee in a manner consistent with adjustments made by
the Compensation Committee under the Lance, Inc. 1997 Incentive Equity Plan
with respect to such transaction.

Award Payments

Each participant shall
receive one share of the Company’s Common Stock for each Performance Equity
Unit and Dividend Unit vested.

To determine the number of
shares of the Company’s Common Stock that vest pursuant to each Performance
Equity Unit (including each Dividend Unit) the Compensation Committee will
compare the cumulative total return on the Company’s Common Stock to the
cumulative total return on Russell 2000 Index over the Plan Years, as
described under Performance Measure above.

Form and Timing of Issuance
of Common Stock

Common Stock will be issued
as soon as practicable after performance measures are calculated and approved
by the Compensation Committee, generally within 75 days after the end of
the Company’s 2010 fiscal year. All awards will be rounded to the nearest
whole share of Common Stock.

Change In Status

An employee hired into an
eligible position during the Plan Years may participate in the Plan for the
balance of the Plan Years on a pro rata basis, with the approval of the
Compensation Committee.

Certain Terminations of
Employment

If a participant terminates
employment due to the participant’s death, disability or retirement prior to
the end of the Plan Years, the participant (or the participant’s beneficiary
in case of death) will receive following the end of the Plan Years, a payment
for the Award determined as elsewhere provided under the Plan, but pro rata
based on the number of days elapsed since January 1, 2006 (or such later
date as the participant was employed by the Company) through the date of
death, disability or retirement. If a participant terminates employment for
any other reason prior to the end of the Plan Years, including without
limitation any termination of employment by the Company or voluntary
termination by the participant (other than retirement), the participant’s
Award will immediately terminate and be forfeited as of the date of such
termination of employment. For purposes hereof, “retirement” means the
participant’s termination of employment with the Company either (i) after attainment of age 65 or (ii) after
attainment of age 55 with the prior consent of the Compensation Committee.

4

Change In Control

In the event of a Change in
Control, pro rata payouts will be made with the performance measure
calculated on the actual average results for the 90 days ending on the
day prior to the Change in Control, based on the number of days in the Plan
Years preceding the Change in Control. Provided, that the dollar amounts in
the performance measure used to determine the Award Level Vested percentage
will likewise be prorated based on the number of days in the Plan Years
preceding the Change in Control. For example, if the Change in Control
occurred on January 1, 2008 (730 days, two years or 40%, rounded, of the
Plan Years) the performance measure would be as follows:

Minimum

Target

Maximum

Common Stock over Russell
2000 Index

$

*

$

*

$

*

Award Level Vested

*

%

*

%

*

%

[*Targets not required to
be disclosed.]

Provided, further, in the
event of a Change in Control transaction described in (iii) or
(iv) below, for the purposes of calculating the performance measure, the
Russell 2000 Index and the Company’s Common Stock shall be valued at not less
than the closing value of the Russell 2000 Index and the closing price of the
Common Stock, respectively, on the last trading day prior to the Change in
Control. In the event of a Change in Control, the Company may elect to pay
any Awards hereunder in cash. Payouts will be made within 30 days after
the relevant transaction has been completed.

“Change in Control” means,
and shall be deemed to have occurred upon, the first to occur of any of the
following events:

(i)
Any Outside Person becomes the Beneficial Owner, directly or indirectly, of
securities of the Company representing twenty-five percent (25%) or more of
the combined voting power of the Company’s then outstanding securities; or

(ii) During any period of
two (2) consecutive years (not including any period prior to the date
hereof), individuals who at the beginning of such period constitute the Board
(and any new Director, whose nomination for election by the Company’s
stockholders was approved by a vote of at least two-thirds (2/3) of the
Directors then in office who either were Directors at the

5

beginning of the period or
whose nomination for election was so approved) cease for any reason to
constitute a majority of the members of the Board; or

(iii) The stockholders of
the Company approve: (i) a plan of complete
liquidation of the Company; or (ii) an agreement for the sale or
disposition of all or substantially all of the Company’s assets other than a
sale or disposition of all or substantially all of the Company’s assets to an
entity at least sixty percent (60%) of the combined voting power of the
voting securities of which are owned by the stockholders of the Company in
substantially the same proportions as their ownership of the Company
immediately prior to such sale or disposition; or

(iv) The stockholders of
the Company approve a merger, consolidation, or reorganization of the Company
with or involving any other corporation, other than a merger, consolidation,
or reorganization that would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity or any parent thereof) at least sixty percent (60%) of the
combined voting power of the voting securities of the Company (or such
surviving entity) outstanding immediately after such merger, consolidation,
or reorganization.

However, in no event shall
a “Change in Control” be deemed to have occurred with respect to a
Participant if that Participant is part of a purchasing group which
consummates the Change in Control transaction. A Participant shall be deemed
“part of a purchasing group” for purposes of the preceding sentence if the
Participant is an equity participant in the acquiring company or group or
surviving entity (the “Purchaser”) except for ownership of less than one
percent (1%) of the equity of the Purchaser.

“Beneficial Owner” has the
meaning ascribed to such term in Section 13(d) of the Exchange Act and
Rule 13d-3 of the General Rules and Regulations under the Exchange Act.

“Board” means the Board of
Directors of the Company.

“Director” means a member
of the Board.

“Member of the Van Every
Family” means (i) a lineal descendant of Salem
A. Van Every, Sr., including adopted persons as well as persons related by
blood, (ii) a spouse of an individual described in clause (i) of this Paragraph or (iii) a trust, estate,
custodian and

6

other fiduciary or similar account for an individual
described in clause (i) or (ii) of this
Paragraph.

“Outside Person” means any
Person other than (i) a Member of the Van
Every Family, (ii) a trustee or other fiduciary holding securities under
an employee benefit plan of the Company or (iii) a corporation owned
directly or indirectly by the stockholders of the Company in substantially
the same proportions as their ownership of the Company.

“Participant” means an
employee of the Company who is granted an Award under this Plan.

Withholding

The Company shall withhold
from Awards or collect from participant any Federal, foreign, state or local
income or other taxes required to be withheld.

Communications

Progress reports should be
made to participants annually, showing performance results.

Executive Officers

Notwithstanding any
provisions to the contrary above, participation, awards and prorations for executive officers shall be approved by
the Compensation Committee.

Governance

The Compensation Committee
of the Board of Directors of Lance, Inc. is ultimately responsible for the
administration and governance of the Plan. Actions requiring Committee
approval include final determination of plan eligibility and participation,
identification of performance measures and goals and final award
determination. The Committee retains the discretion to adjust any award due
to extraordinary events such as acquisitions, dispositions, required
accounting adjustments or similar events; anomalies affecting the
calculations under a performance measure or where fairness to participants or
the Company require an adjustment. The decisions of the Committee shall be
conclusive and binding on all participants.